Wednesday, September 15, 2010

On Monday I told you about HHS Secretary Kathleen's Sibelius's warning to health insurers that they would find themselves in the statist penalty box if they tried to raise rates and blame it on Obamacare. On Tuesday, I told you that Republican nominee and former World Wrestling Entertainment executive Linda McMahon was giving Connecticut Democratic AG Richard Blumenthal (and Vietnam Veteran wannabe now that the war is over)a run for the money in the race to replace retiring Christopher "Friend of Angelo" Dodd in the United States Senate.

Today, in a serendipitous amalgamation of these seemingly unrelated revelations, we learn that the companies that provide health insurance to the citizenry of the historically solid blue state of Connecticut are requesting significant rate increases to assuage the devastating blow that the new Democratic health care mandates deliver. From CTnow.com:

Health insurers are asking for immediate rate hikes of more than 20 percent in Connecticut for some plans, citing rising medical costs and federal health reform laws as reasons.

Both issues — the new federal health care reform and rising medical costs — are significant drivers of the increases, according to filings by insurers with state regulators that were reviewed by The Courant.

It remains to be seen how much of the requests will be approved. Many people might not see an increase before Jan. 1, and these proposed changes would largely affect new business, mostly in the individual market.

But the overall price shift is the clearest indicator yet of what customers and employers can expect when health insurers submit proposed 2011 rates in late October and November. The current round of price requests launches a clash between insurers who say the increases are justified and consumer advocates and government officials who say the numbers are wildly inflated.

Aetna asked earlier this summer for an average 24.7 percent increase over last year for small-group HMO plans. State regulators approved an average increase of 18 percent for all of Aetna's small-group plans and 14.2 percent for large-group and middle-market plans, according to Aetna and an initial review of documents provided to The Courant by the state Insurance Department.

A complete tally of average price requests is not available, as the Insurance Department must decide on hundreds of health plans and variations of plans for the five major companies offering medical coverage in Connecticut. But an examination of the documents suggests that the requests might be even larger than those of recent years at a time when health insurance has become a political hot potato leading into the midterm elections.

In what might appear to be an oddity, companies are citing a huge range of effects that the health care reform mandates will have on plan prices — from near zero to well over 20 percent. The reason is that among all the plans, some already deliver the provisions required by health reform, while others do not.

ConnectiCare is seeking an average 22.2 percent hike for its individual-market HMO plans, according to a filing with state regulators. The insurer's plans would result in an average annual increase of about 13 percent for the overall individual market, including HMO and other plans; 12 percent for small-group plans; and 11 percent to 12 percent for large-group plans, said vice president of actuarial services Kevin Grozio.

Anthem Blue Cross and Blue Shield in Connecticut, by far the largest insurer of Connecticut residents, said in a letter that it expects the federal health reform law to increase rates by as much as 22.9 percent for just a single provision — removing annual spending caps. The mandate to provide benefits to children regardless of pre-existing conditions will raise premiums by 4.8 percent, Anthem said in the letter. Mandated preventive care with no deductibles would raise rates by as much as 8.5 percent, Anthem said.

It was unclear how those separate factors would add up for Anthem's plans, but those potential increases were all on top of rising medical costs.

CIGNA Corp. is asking for an increase of up to 1.3 percent for adding preventive care provisions, a 1 percent increase for waiving pre-existing conditions for children up to 19, and an increase of 14.5 percent for children from birth to 18 for new business, according to the Insurance Department.